Curve founder proposes recovering DeFi bad debts through a market-based approach

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Golden Finance reports that on April 27, Curve founder Michael Egorov proposed recovering bad debt in lending protocols by converting impaired positions into tradable investment products.
The plan uses Curve’s own CRV-long LlamaLend market as a pilot, which incurred approximately $700k in bad debt in October 2025.
Michael Egorov has established a Curve Stableswap pool with about 71% solvency, allowing trading of impaired vault tokens.
Traders can buy at a discount, liquidity providers can earn fees, and the DAO can accumulate impaired tokens through management fees.
Currently, community feedback on this plan is mixed, with some users questioning whether impaired positions lacking immediate returns can attract buyers.

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